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Negative electricity prices in Europe

As negative power prices rise in Europe, Montel’s Josephine Steppat explores the causes and market response.

What are negative prices?

Negative electricity prices happen when supply outstrips demand. In simple terms, producers are willing to pay to stay online. It sounds strange but in power markets with lots of solar or wind, it’s becoming more common.

In this short guide, you’ll learn what’s behind the rise in negative prices and what it means for renewable energy, trading strategies and market design.

Who does it impact?

Negative prices affect everyone involved in the power value chain:

  • Renewable producers risk losing subsidies or revenue when prices fall below zero.

  • Utilities and traders must rethink how they buy and sell electricity.

  • Battery operators and flexible users can profit by absorbing excess power when prices drop.

Key takeaways

  1. Negative prices are rising fast across Europe, especially in Germany, France, Spain and Poland.
  2. Regulatory changes like Germany’s one-hour rule are cutting negative prices but boosting zero-price hours.
  3. Flexible demand and battery storage are key to managing oversupply and stabilising markets.

(No) reasons to be so negative? (EN)

Causes and development paths of negative power prices.

FAQ

  • Oversupply from renewables like wind and solar during low demand periods causes prices to drop below zero.
  • They show the system is under pressure but also offer opportunities for innovation in demand response and storage.
  • By adjusting trading strategies, investing in flexibility, and understanding local market rules.